Summer Repeat: She Loves America

I first ran this one in "the Blog fornerly known as Tempus Fugit" several years ago.  Sadly, it's as true today as it ever was. So for you, gentle reader, a cautionary tale about the perils of not developing local talent -

 

She Loves America… but America doesn't Love Her.

This was, albeit the short form, the sentiment that I heard from a blogger colleague of mine referring to the recently appointed replacement coming to "save" the North American subsidiary of "brand x".

I've written on this topic before, but with the inevitable annual "house cleaning" session that we are about to witness, it seemed like a pertinent topic again.  Please indulge me while I revisit the ongoing challenge faced by the watch industry in the US and Canada.  So basically, brand x is in Switzerland.  They have tried several different solutions, that like death can be broken down into specific stages:

1.  Go with a distributor for about 10 years.
Everything seemed to be going okay.  Sales were very, very strong.  But then they started to hear rumblings.  Their watches were showing up in many places that were not exactly "official retail partners" which is a polite way of saying "grey market".  How did that happen?  Simple, the distributor wrote very large orders to stores and store owners who in fact were doing massive amounts of trans-shipping.  In other words, although some of the watches were in the "front area", the majority of the watches were being sold out the back door before they even made it into the store's safe.  So a change had to be made.

2.  Hosanna!  We have the solution!  A young Swiss sales manager saddles-up and heads across the water to "take the situation in hand".  And like any great television sitcom, hilarity ensues!  Language and cultural miscommunication leads to acrimonious feelings between the "natives" and the "over lord".

Sounds pretty harsh?  Trust me, I've heard worse from both sides.  This situation is destined to fail for a number of reasons, but essentially what resonates is that:

To the parent company - The North American team sucks.  They are little children that clearly can't handle the job, and we have to "keep an eye" on them.

To the "home team" - Oh great, another "idiot son" sent to "train for the future" by running the North American subsidiary.  This genius can't even figure out where the toilet is!

Needless to say, things don't work out.  A year to three is about how long this usually runs.

3.  Okay,  let's hire someone to run our subsidiary.  And while everyone may love this person, they stand about the same chances as any new restaurant opening.  Because at this point, the feeling is that things better go right.  This person will usually be given about half the time to fix or establish the brand.    Very few people can do it, and those who can't?  Well don't worry, you'll see them working for a different brand inside of 6 months.

So what am I trying to say here?  PATIENCE needs to be the policy.  Your brand didn't go bad overnight, it was a slow, but steady process.  You will not be able to "fix" your brand overnight either.  Be realistic, and unless your Brand Manager gets caught with a dead body and a bath tub full of cocaine, give them a bit more time - good things, some times take time.

The Transfer Window Opens (for the FOURTH TIME IN TWO YEARS)

At Tag Heuer...

Courtesy of Tag Heuer

In the interest of transparency, I have about as much interest in the machinations of Tag Heuer and the LVMH watch stable writ-large as I do in hemorrhoid treatment. Actually, that's not fair. If and when I do develop hemorrhoids I suspect I will have more than a passing interest in the healing properties of Preparation H. But as they say, sometimes you have to lance a boil, and as this is outlet that talks about watches (allegedly), I guess we have to give "mighty Tag Heuer" some air time.

Okay, let's get to the heart of this. I have no doubt that the new person in the hot seat is probably more experienced and capable than the winners of the Arnault Family DNA Olympics. And add to that, Ms. Goasglas has been with Tag Heuer since 2018, and held some pretty big jobs with them. And it doesn't hurt that she is French, because although HQ is in La Chaux-de- Fonds, the real marching orders are coming from an arrondissement several train stops North by Northeast.


The timing is a wee bit quirky as well, why hold off for May 1? There is a little event that some people say is even more prestigious that The HYPE NYC ; )

The real question is this - what the f&*k has been going on at Tag Heuer and LVMH's watch division? Hublot has become an afterthought, and Zenith is starting to operate from the Sunk Cost Trap theory of business -

https://www.henkitime.com/2017/04/the-sunk-cost-trap.html

So what I'm driving at is this: for all his faults - and he has more than his share, the LVMH watch brands (Hublot, Tag, and Zenith) under Jean-Claude Biver's oversight at least seemed to know what they were doing. Or in Zenith's case what they were trying to do.

Regardless of the heroes and zeroes of the (recent) past, we at Henki Time wish Ms. Goasglas bon chance and Godspeed.
Tag Heuer may just be a dog that won't hunt, but we shall see.

Baumes Away!

Word reached the North Shore offices of Henki Time that speculation was no longer necessary. Richemont has pulled the trigger and an agreement has been reached with the Damiani Group for them to take control of Baume & Mercier, and off of the Richemont books.

Without going too much into the heroes and zeros, I'd like to really address a bigger issue that a few other outlets have hinted at, but nobody has really been willing to address - the lack of understanding of identity that many brands suffer from. And those brands in particular? They tend to reside in larger (and sometimes smaller) groups.

Now if we stick strictly with Baume & Mercier, in truth? It's a brand that with even just a little bit more attention from the Richemont leadership, and a bit more understanding about where they lived within Watch Town writ large? Well they could have made a LOT more money and not be an asset needing to be sold. But a big part of that has to do with what I constantly share with the brands I consult for - you must know who you are, you must be comfortable in your own skin, and you MUST PUNCH YOUR WEIGHT.

Let's look at some other examples. I realize all of the other pundits are talking about Zenith. But in truth that is a bit to obvious. We'll come back to it. Let's talk about my old frenimy - Mido. Mido is a brand that can't seem to decide who they are. Are they retro - with the heritage Commanders and Ocean Stars. But then again - countless numbers of SKUs. And here in the US, opening and closing US offices, and going back and forth with concepts. In truth? The majority of what Mido cranks out could really have any brand's name on it. There is very little to distinguish it. Now, in fairness, I have to assume that from their shared administration offices in Le Locle that they make enough money that for better or worse, Hayek the Younger, and Hayek the Even Younger are willing to swing along.

Staying with the Swatch group, let's consider a brand that has an identity that gives it some flexibility, but also has the ability to know itself - Longines. Longines is, if we're honest, what Baume & Mercier should have always focused on being. A step or two above Tissot, but absolutely priced in real world economics. In the real world, a $1,000 - $2,000 watch purchase is going to be a once in a lifetime purchase for most people. And if I'm being honest? That is really what attracted me to watches in the first place. It wasn't about the brand, or how many I could / would get to have. It was about a nice thing that was with you every day. Something that was truly fine, that you had always wanted.

But I digress...

Let's go back to Le Locle - and Zenith. Zenith is a brand that I admire a great deal, and a brand that seems to be cursed to poor stewardship. It has been traded somewhat like a baseball card that each person who acquires it hopes will somehow pivot and make them millionaires. The reality is not nearly so rosy. 

Zenith has had the misfortune to land in the hands of a succession of wannabe operators who it turns out were just marking time until the next warm body came along. And with the stewardship of Arnault, Arnault the Younger, and Arnault the Even Younger nothing seems likely to change the trajectory of Zenith. The piece none of us pundits really know is whether or not Zenith is profitable, breaking even, or losing money. My sense is that Zenith has become a sunk cost trap for LVMH. And as with so many people who are successful with many things, it is hard to see, acknowledge, and accept failure when it finally rears it's not-so-attractive head. And Zenith and LVMH's inability to effectively address it is Watch Town's Dunning Kruger Effect writ large.

Now unlike the Watch Bros who apparently know more than anyone else, I am not going to presume that I would know how to fix Zenith. To quote that great movie about the watch business - The Sound of Music: "How do you solve a problem like Zenith?"

So what have we learned from all this? Sadly - probably not a damned thing ; )

Watch Town has a painfully short memory. We forget that once upon a time, apart from a handful of successes, the watch business was a grind. The idea of a Rockstar Watch Maker or CEO was ludicrous. We forget that watch making in Switzerland started out as a way for farmers to make money during the winter when they couldn't farm. And I am a bit of a traditionalist, but perhaps a bit of humility coupled with fiscal responsibility wouldn't be too far misplaced?

Richemont's sale of Baume & Mercier is perhaps the wisest decision they have made for some time. Selling a brand to another suitor who will hopefully take it further than you did is not really a failure, it shows the sort of wisdom that is in short supply in Watch Town. But maybe this will be the first shift towards common sense that will hopefully start a trend which will help some of these red-headed step-child brands not only survive, but one day thrive.

But as with anything in Watch Town, we will wait, and we will see.

The Transfer Window Has Opened...

At Tag Heuer -

Although Miss Tweed had floated this news the middle of last week, I am a bit of a traditionalist and also think when you are unceremoniously dumped by the love of your life, you should be afforded some measure of dignity. So I have been waiting for an official announcement which has now been made. Former Tag Heuer Antoine Pin has, in the words of the caring, compassionate folks in the LVMH PR Department:

“decided to start a new chapter in his career”.

I have to be honest, that level of sentimentality gets me all choked up...

How do you sum up the career of someone who, let's be honest, gave A LOT to Tag Heuer and what was to become the LVMH watch division over several decades? Ideally something more eloquent than what was offered by the wordsmiths in LVMH's gas factory.

But as Watch Town has taught yours truly not so long ago - you can give and give and give, but nothing trumps family. Now in truth, unless Arnault - The Even Younger, or Arnault - The Gleam In The Milkman's Eye is kitted-up and stretching on the touch line, LVMH Watch Week is going to have the not-so-discreet waft of a damp fart with the absence of a CEO of the most important jewel in the crown.

We shall wait, and we shall see, but we wish Mr. Pin good luck and Godspeed.

Whodinkee Now?

Tempus Fugit! (that's time flies for those of you just tuning in).

I woke up (or more aptly, was woken up) by the Executive Publisher hoping to get an early (3:30 AM) breakfast. After donning my butler's togs and serving her entree, I toddled back upstairs and attempted to get back to sleep. I did a perfunctory scan of various sites and there was Ben Clymer once again front and center with a big announcement. In all honesty, I found his post a wee bit defensive and definitely self-congratulatory. I wonder how the folks who were made redundant over the years read it?

https://www.hodinkee.com/articles/hodinkee-to-join-forces-with-watches-of-switzerland

The headline reads -

Hodinkee Joins Forces With Watches Of Switzerland

In other posts on the subject, it seems a slightly different read has been offered - 

https://www.watchpro.com/watches-of-switzerland-group-buys-hodinkee/

Watches of Switzerland Group buys Hodinkee

Troubled media business acquired for an undisclosed sum.

While I won't go into the heroes and zeroes here - because no information has been forthcoming on the subject, I would say that the whole Hodinkee saga of the past several years has been a mirror image of what is so wrong in Watch Town writ large. Celebrity "chums", limited editions marketed to appeal to the egos of those celebrity chums, and a basic lack of understanding as to the fundamental difference between an elastic and inelastic demand. 

Per Don Hofstrand of Iowa State University's Extension and Outreach program:

An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small.

So the next big question for the brain trust at Watches of Switzerland - does Hodinkee's content and influence represent an elastic or inelastic demand sufficient to recoup the amount spent on this acquisition? Was there enough for Tom Brady and John Mayer to get some of their pocket money back? 

The simple truth is that Hodinkee in its previous form was an unrealistic and unsustainable model. And the market spoke. It sounds wonderful to refer to this as a strategic partnership, etc., but in point of fact, it is an acquisition.

The Transfer Window Opens - Welcome to Crazy Town

Well for those who were on the edge of their pool floats or chaise lounges, fear not! The transfer window is apparently still open and though this is more fish-wrap than news at this point, let's get caught up, shall we?

News was strategically placed with that bastion of impartial reporting Hodinkee (oops, coffee just shot out of my nose and I need to take break to wipe the screen) that "Arnault, the even younger" had a case of the fidgets and hiked up his leg to more firmly "mark" his territory around the halls of LVMH's watch division. Long story short? Former favorite of God (JC Biver) Ricardo Guadalupe (you may remember him from such jobs as "CEO of Hublot") has either decided, or been asked, to sling his hook and take it on the arches. Now the official word is that he will be assuming the position of "Honorary President" of Hublot, which essentially means he won't be required to go to board meetings and he can play out his contract. He is only 59, so I tend to doubt that this will be his last stop, but you never know.

I have no doubt this suits junior just fine as Guadalupe was the last of Biver's palace guards, and know the only thing he is running is Jack and shit, and Jack just left town.

But then the other intriguing turn - fresh off of a truly stunning few months at Tag Heuer (yes, that was sarcasm) Julian Tornare leaves La Chaux-de-Fonds in the rearview as he heads south to Geneva to lead product placement firm Hublot. 

Rumor has it they make watches as well ;)

Now the other funny bit in all of this is reading the commentary from some of my more well-heeled colleagues in Watch Town's Fourth and Fifth Estate claiming that Mr. G had spent too much time and focus on brand partnerships and famous "chums". It is clear that they slept through the Biver years at Hublot ; ) 

This is made even funnier when notable conspiracy theorist and pro football player Aaron Rogers was picked to "Reach His Star" (still the worst tagline ever) on behalf of Zenith. So look for more NFL quarterbacks to be joining the Hublot stable now that Tornare can indulge in fantasy football picks with a real budget to throw at them.

But then perhaps the goofiest turn of events came from independent brand Audemars Piguet. You might have heard of them, old family owned independent brand with one and a half product collections? It would seem that although the Royal Oak continues to be hotter than Satan's jockstrap, Hodinkee's personally anointed sage on all things horology and pop music has been tipped to be a special envoy. So needless to say, Hodinkee will now be able to rhapsodize about which version of the Royal Oak best sets off a tattoo sleeve with leather jacket sleeve zhuzhed. Give me strength...

Here is the info, straight from AP -

A unique collaboration.
We are thrilled to announce that we have appointed the iconic American singer, guitarist, and watch collector, John Mayer, as our “creative conduit”.
In this unique role, John Mayer will not only act as a channel of creativity, pushing the brand to explore new horizons and elevate our technical, aesthetic, and ergonomic developments, but he will also serve as an important translator between Audemars Piguet and watch enthusiasts worldwide. His collector’s eye and deep insight will guide us in innovating to meet the ever-evolving needs and expectations of our clients.

Okay, I have absolutely zero idea what a "creative conduit" is, but this new "job" for Mr. M truly begs credulity. I mean, unless he has some idea to save the 1/2 product family the ill-fated Code 11.59, 'cause that is one turd that seems to refuse to be flushed....

Do you mean to tell me that Audemars Piguet, with more cash than some small third-world GNPs, and with 1 of their 1.5 product families having one of the most sought after watches of all time needs a man notable for these bon mots which he dropped in an interview with noted watch collector enthusiast magazine, Playboy -

“My d–k is sort of like a white supremacist,” Mayer went on. “I’ve got a Benetton heart and a f—in David Duke cock. I’m going to start dating separately from my d–k.”

Well, I guess AP knows what their doing...

Let's hope Mr. Mayer keeps "little David Duke" in his pants, it's Le Brassus, not Las Vegas.

The Transfer Window is WIDE OPEN

At Richemont -

Now, it is safe to say that this is not exactly "stop the press" news at this point as it dropped over a week ago. But I found it curious with the flurry of comings and goings of all of the changes happening with both independents and the shuffling at Richemont. Two of the independent changes are not huge news because, at the risk of sounding uncharitable, who is running Scwharz Etienne or Favre Leuba is not really going to be as seismic industry wide as who the shot callers are at Cartier and Jaeger-LeCoultre. And despite the crowing of a certain subscription based newsletter author, the word around the campfire in Watch Town was that the eminent departure (whether by separation or reassignment) of the CEO of Jaeger-LeCoultre has been in the offing for quite some time. 

In fairness to Richemont, they tend to shuffle the deck pretty regularly, and unlike a certain French based luxury group that rhymes with LVMH, leadership decisions are not based on the participation trophy awarded in the familial Olympics that ensure the Arnault offspring will be occupying the C-Suite regardless of experience or ability. 

So, we will wish all of the participants bon chance in this latest game of Richemont Musical Chairs! Who will fill in the rest of the slots? We will wait, and we will see. Just listen carefully to the pace of the tune, you don't want to be caught out when it suddenly stops.

Family Business

The word came down from LVMH HQ that Frédéric Arnault was now in charge of all things watches within the group. And with all due respect to Hodinkee (and if the comment section is anything to go by, I am not alone in my feelings), Mr. Anault's mercurial rise within the ranks of LVMH's watch division seems unlikely to happen anywhere else in Watch Town. The tone of the coverage from the 'dink was bordering on sycophantic. And not for nothing, it is understood that LVMH has invested in Hodinkee.

Family Business

It is not lost on anyone in the watch business that many of the most successful brands are businesses that have been started and run by individual families. Over time, several family owned brands made the decision to bring in outside talent to manage their brands. The recent departure of Mr. B at Audemars Piguet is a good example of this. AP could have engaged in the DNA Olympics, but opted for competent management that didn't happen to fall off the same family tree. 

It can also be said that there are family owned (and controlled) brands that have (by and large) remained in the family and gone from strength to strength - the name Stern still rings out loud and clear in Watch Town. But it is also important to understand that Thierry Stern grew up in the business, and spent years (not months) learning it. 

The Boss's Kid

I am no stranger to enjoying the largesse of perceived (and possibly real) nepotism. My father was a country club manager and as a teenager a job was arranged for me in the locker room of the Elyria Country Club where I spent my weekends and summers polishing members shoes and cleaning their golf clubs. I wasn't paid any more or less than my colleagues, but my hours were wildly elastic and absolutely to the benefit of my ability to go play in soccer games that my faither was coaching. I was not quite made the CEO of a watch brand, but I suspect the impact of nepotism (both perceived and real) has on the people you work with is a pretty universal and cross cultural one. You will always be judged with more than a soupçon of doubt.

Now it is safe to say that Mr. Arnault did not grow up in the watch business. And that is not necessarily a disqualifying factor. Several leaders in Watch Town came through different channels. But invariably, these folks had other experience in other industries. Mr. Arnault's CV prior to joining Tag Heuer was a little thin. His age at that time was in question by many. For me, in hindsight, I would not point a finger at age, but rather a lack of experience. We fast forward now some several years later, and Mr. Arnault certainly has some experience under his belt (both business and life). But to say that he single handedly made Tag Heuer a success is myopic (sorry Hodinkee). A lot of time and effort from a LOT of people before Mr. Arnault arrived paved the way for the path that Tag was and continues to be on. But as I have learned over more than 20 years in Watch Town, it is more often than not the family heir that receives the laurels as the last person standing.

Reality Check 

Regardless of what watch fans, the business world, or we members of the Fourth and Fifth Estate think and claim to be expert on, there is one simple, plain reality - LVMH is an extremely large, and by all accounts extremely successful juggernaut in the luxury business world. And with all due respect to all sides, it is a business that is essentially owned by the Arnault family. And to put it even more bluntly - Hublot, Tag Heuer, and Zenith were not exactly robust brands on their own. They needed (and still need) the group to support them, there is really no denying it. 

And One Last Bowl of Truth Soup

It is easy to be earnest and nostalgic about brands. It is even easier to shout that "I could do it better!" Watch fans are not entirely unlike fans of professional sports teams - we are a somewhat obsessive, overly opinionated lot that are convinced that if we were given the keys to the castle and a seat behind the big mahogany desk we would somehow know better and be hugely successful. And that just isn't true.

I think Mr. Arnault deserves the opportunity to prove himself now that he has landed in the hot seat. But to the historical revisionists out there, let's not forget that Tag's success is currently more down to the efforts put in prior. It doesn't mean Tag won't continue to prosper, but let's be real about assigning credit when we're handing out the roses ; )

What I've Learned - The Morning After Edition

Over the past few days, news has slowly trickled out about the most recent round of layoffs at Hodinkee, that by joyful coincidence have come just in time for the holiday season. While I suspect a few luminaries are still sunning themselves by the banks of Lake Geneva, the reality of what is really going on is tightening more than a few sphincters as all of Watch Town's great and good go through duty free picking up their giri (that's Japanese for duty, Gaijin!) gifts including toys and chocolate for the youngsters. Probably more than a few of these fine guys and gals will be updating their resumes and considering going into some other field that is not as dependent on the willing suspension of disbelief in the light of woefully unsustainable business plans. Lucky for them, liquor is still free on most international flights, which should make for a more focused cover letter upon sobering up Monday morning.

So the party, for many, is over. For many others, it's clear that the band has gone home, and the cleaning staff are starting to get a wee bit grumpy.  And this is true for the watch business and watch media business as a whole. Hodinkee just happens to be the canary in the coal mine.

So as much as I hate my prognostications being proven right (albeit years after making them) here goes. I will be calling on the help of several other notable watch industry experts, so here goes -

What I've Learned - The Morning After Edition

“The key to the game is capital reserves. If you don't have enough, you can't piss in the tall weeds with the big dogs.” 

Michael Douglas as Gordon Gecko in Wall Street.

So as I mentioned yesterday, +$40,000,000.00 doesn't seem to go nearly as far as it used to. To be fair, Hodinkee is not guilty of anything more or less dumb than what many Swiss watch brands have done (and will continue to do). They simply assumed that hiring a LOT of people, launching (in retrospect) an ill-advised watch insurance program, and doubling down on a fairly dubious move into online retail would pay off. 

And curious to relate? They have been forced to go to the well on more than one occasion to top-up the tank. And as I said, this is no different than innumerable Swiss watch companies. Money is always a problem. If you don't manage it, it will manage you. And Hodinkee is not the only erstwhile media company that has been drop-kicked through the goal posts of ill-advised retail. And if those two missteps weren't enough...

"Even Napoleon had his Watergate"

Yogi Berra

Hodinkee's Last Layoff

Now keep in mind, that was back in September. We are now just over 2 months later, and if the rumors are true, this might have resulted in further cuts in terms of headcount than in the previous round. Those who will say don't know, and those who know won't say. It's all well and good to point the bony finger of blame at a seemingly great acquisition gone wrong. But the fiscal realities staring them in the face comes down to more than mere buyer's remorse. Crown and Caliber, in hindsight, might have been an ill-advised purchase. But the deeper question is what really drove that purchase? Let's hope more than ego.

"Always remember why you bought the club (Company) in the first place."

Barry Hearn - The 10 things I learned from owning a football club.

In fairness, I suspect that owing a piece of Hodinkee was a pretty attractive proposition. It even caught the eye of The Wolf in Cashmere. And you never know, it might be attractive enough in its new, "value proposition" (sorry, too soon?) condition that if there is another "Arnault the Even Younger" out there looking for a youth-training opportunity, LVMH might pump in another round of investment and parachute another offspring fresh off a Berlitz English class to take the helm. But the truth in all of this is pretty sad when you think about the many people now out of work. And in fairness, I do feel bad for the founder, one Mr. Clymer. Now in all candor, I think we have met exactly twice, and I think it was equally unmemorable for both of us. Well, probably more unmemorable for him as I am sure that he has no memory of either instance ; )

But at the same time, I also find my sympathy challenging to balance. This is a guy who, after all, came from UBS, and was not one to hide his light under a bushel. But the real test now is how Hodinkee pivots. Hopefully in a positive direction.

"You've been drinking too much of your own bathwater."

Henki

As a middle aged man I think I can say this with some authority. Every man thinks he's good looking and has a great sense of humor. And the watch media business is, by and large, a sausage fest. If we are being honest about things, Hodinkee has not been living in reality. $40,000,000.00 seems like a lot of money, but when you live beyond your means, it can be gone pretty quickly. Jack Forster, Jon Bues, Cole Pennington - you may remember them from such roles as: "Editor - Hodinkee." 

They have come and gone. Whether these departures were the result of fiscal concerns remains to be seen (or said). There are some loyalists still in the fold, so we shall wait, and we shall see. But the bottom line is that sustainability is key whether you are running a lemonade stand, or a media/retail venture.

Now beyond anything else, the latest issues at Hodinkee are a bellwether for the watch media business as a whole. One large watch media outlet has apparently done some front-office redecorating with their (now former) US Editor seeking pastures greener. Others are struggling to balance commerce with editorial. It is a tough needle to thread, balancing editorial with commerce. It's an even tougher needle to thread when you have myriad investors expecting a positive return on said investment.

The Transfer Window Might Be Opening...

At LVMH.

You can get a much more detailed report from the folks at Watch Pro, who in turn cite an article from NZZ. Long story short, word around the campfire is that that "Arnault the Even Younger" - Frédéric Arnault is getting an upgrade and moving over to Bulgari in what is being referred to as a senior role. Neither LVMH or Jean-Christophe Babin seem to have much to say on the matter. 

On the upside for Julien Tornare, he will not have to move too far in this latest game of musical chairs as Le Locle is within walking distance to La Chaux-de-Fonds. Because if the rumors are to believed, he will be moving a few miles down the road to take over junior's spot at TAG Heuer. Who will "reach their star" (still the worst tag line ever) as the new CEO at Zenith remains to be seen, as Arnault the Elder may have run out of offspring.

So we shall wait, and we shall see.

Watches and Still Wondering - 2023

As the big week approaches, the reality becomes ever starker. This appears to be a fairly unique year for the Prom King / Prom Queen vote that is the experience of trying to get a press credential at Watches and Wonders.

In the past, there was BaselWorld. And in fairness, although it was challenging to get hotel rooms and you paid outlandish prices for basic meals, you could still hope to get a press accreditation. SIHH, although snottier than a frequently used Kleenex tissue during cold & flu season, could justify it because it was (for all intents and purposes) just the Richemont group with assorted "chums". But when the rats finally fled the sinking ship that was BaselWorld, it left a vacuum not unlike when an authoritarian regime is deposed - another authoritarian group filled the gap. So let's ask a few uncomfortable questions:

1. If the purpose of having a press-friendly event is to have actual press attend and cover said event, why would you eviscerate your press accreditation list?

2. If the answer to that question is that "we simply don't have the space", why are you then increasing the number of press invitations that you are giving to certain outlets? Rather than 2, some outlets have as many as 5.

3. If you are not including 80% of the press in the beauty pageant - i.e. they will not be receiving a press accreditation even WHEN HELL FREEZES OVER (global warming is real), why are you gathering the contact information for that same group of disenfranchised journalists and packaging it for your client brands as part of their service fees? Apparently some of us are not good enough to visit the booth, but we are, apparently, valuable media contacts. It's a little sleazy.

Here's the thing - Watches and Wonders has the right to make a fair any way that they want. But don't tell me that Watches and Wonders is inclusive (or even important) when so many people are excluded from attending. And where that used to be a smaller group, several long-term attendees got snubbed this year. So it seems that relationships are not quite as eternal as a Cartier watch ; )

The other shows will continue to get passive aggressive / aggressive-aggressive treatment from the city of Geneva (which is indirectly the firm hand of Richemont, LVMH and the other Gang of 4 up their backside like a Howdy-Doody puppet). And the beat goes on.

So as always, spring brings eternal hope. But as anyone who grew up in the midwest will attest, the thawing of snow reveals the forgotten mess that the dog left in the backyard just before Thanksgiving ; )

Enjoy your watches - and support a free watch press!

Shame - It's Actually Possible We Don't Have Any...

So I wanted to follow-up on my post of this morning.  And it seems we have some initial answers. And they are pretty disappointing.

Earlier today, an outlet far more popular than this one had the intestinal fortitude to speak some truth to power and put himself out there -

https://watchilove.com/open-letter-to-the-watch-industry

Dan-Andrei Kluska writes for a much bigger audience, and is sought after by much fancier brands than yours truly ; ). 

It says something about the situation that we find ourselves in, that someone is willing to put himself out there in an effort to help OTHERS, because in truth, there is nothing necessarily "in it" for him. He has my complete and total respect.

As I type this, the invasion continues. Tens of thousands of women, children and their pets desperately trying to get to safety. Think about that, their first concern is their children, the second their pets. I don't get the impression that they are packaging up their watch collections to ensure that they have all of the original boxes ad papers. 

It's a shit-show, and there isn't much that many of us can do, but there are some small things we as journalists, you as fans, and perhaps most importantly, the brands themselves can do. I am writing this with the assumption that on a basic, fundamental level, we can all agree that mindlessly killing innocent people and destroying their homes is maybe not a positive thing.

And before we duck and cover under that familiar "we don't get political" stance, I think that we can agree that the indiscriminate bombing of a helpless civilian population is not political. It is barbaric. Which brings us to the next question, do you really think that a tagline like this is going to work to stimulate Christmas/ Holiday sales:

"When you're working hard to destroy and displace an entire civilian population, every second counts!"

Maybe it's time for all you wonderful watch brands to sack up and take a stand? BP, and Shell have pulled out. Think about that for a minute. When some of the worst corporate citizens on the face of the earth feel that their image will be too tarnished by continuing to do business in Russia, that should tell you something. Adidas has dropped the Russian Football Federation. Adidas has been willing to look the other way for years regarding doping, dubious bidding practices to secure World Cups and Olympic Games as well as the most corrupt organization in all of sport, FIFA. When even Adidas drops you, well that is when you've hit bottom. Ford motor company and Volvo are leaving and the beat goes on. Perhaps the one brand's announcement that should let SWATCH, LVMH, Richemont, Rolex, Patek and everyone else realize that they are potentially catering a pariah party is Harley Davidson.  And this is a BIG deal, as sales to Russia represent a good slice of European sales which combine for over 30% of the global total. When the preferred supplier to outlaw bikers around the world decides that you're "too gangster" even for them?!?  Does this not say something loud and clear? 

And in truth, it's not even about a full-on boycott. What about using your social media accounts to simply say, I don't know, "No More War"?  The Lego company has donated A LOT of money to aid refugees and just announced it. And I think this is the thing that I find so frustrating in this entire situation - helping the helpless of Ukraine does not automatically mean you are blaming the Russian people. Which in truth, is not the point of any boycott or protest. The Russian people are just that, people. From all indications, it seems clear that they do not want this war either. Boycotting Russia does not mean boycotting Russians. And if cutting off watch sales for (hopefully) a few months can help curtail the war and stop this madness? 

Then let it.

Watches and Wondering - Waiting for Godot

With the dearth of new releases out there, and the notable silence from the fair's organizers, it is seeming less and less likely that 2022 (at least March/April) will see the return of large scale, in-person watch fairs in Geneva.

Credit: https://www.imdb.com/title/tt0276613/

On the one hand, it appears that the latest COVID surge has peaked in several countries. But reaching the peak does not put us back to a safe infection level... at least not yet. Geneva is one of the strictest cantons in Switzerland in terms of health and safety policy, and for all of the foreign buyers and press that hope to come to attend a show there are quite a few hoops that they will have to jump through - I say this having travelled in September and November. And that's just to get into Switzerland. I will also make clear that I agree with Switzerland's stance. Which I guess means that Novak Djocovic won't be making any personal appearances at the Hublot booth in the near future.

China and Hong Kong represent the largest block of customers for Richemont and most likely LVMH and Kering. For those folks, getting to Switzerland is one thing. Coming back home? Well, that's quite the other. Lengthy quarantine requirements have marked a significant drop in travel both from and to this region. So with all of that being said, I don't expect that a lot of these folks will be opting to attend. And let's not even get started with the US, where (for better or worse) public health and safety has become more of a political issue than, well, a health and safety issue. Unless the Swiss government opts to drop the vaccination requirements for entry at the Zurich, Basel, and Geneva airports, a large swath of folks from North America will be staying home. 

That leaves the Middle East, Africa, South America and parts of Europe. This is not to say that these are not important markets or customers, but it is to say that they do not, unfortunately, represent the same percentage of turnover for the brands.

And lastly, there are the organizers of the show itself. Watches and Wonders, along with its predecessor the SIHH, went to great lengths to create an atmosphere of not only exclusivity, but exclusion in the past. And while it might be "the only game in town", I give Watches and Wonders about as much consideration as I do NOMOS
Glashütte, which is to say I don't consider it at all.

Who Moved My Gruyère?

So for those of you not familiar with Who Moved My Cheese? Allow me to fill in the gaps in your late 90s corporate education.  

Courtesy of Spencer Johnson via Wikipedia

The story involves two mice, and two "mini" humans. Spoiler alert, they traverse the halls of a corporate HQ searching for "Cheese Stations" where they can find... cheese. And yes, the halls are a metaphor not only for a maze that lab rats would run through, but also the "maze" that is navigating corporate life.  In the story the mice figure out pretty quickly that the cheese supply at a given station is about to be exhausted, so they take it on the arches and seek out new sources for cheese. The two "mini" humans keep eating the cheese until it is pretty much exhausted, and then begin blaming each other for their fate. Eventually one of the "minis" slings his hook and strikes out in search of as yet untapped cheese stations, leaving the "stuck in his ways" colleague behind.

Spoiler alert part deux - the intrepid "mini" human struggles, but eventually discovers more cheese and in the process unfurls a thesis on change and adaptability that would make a Harvard Business School professor proud.  And I thought today, after reading the latest "falsely rosy" outlook from the FH on the truly stinky export figures, I thought we could air out Who Moved My Cheese for the big dogs in Watch Town.  To wit, I present:

Who Moved My Gruyère?

Change Happens

They Keep Moving The Gruyère.

So maybe Watch Town should respond with a different approach than the same one they always try. And this is true at every level:

1. Brands - stop putting all of your eggs in the same basket in terms of retail and marketing. Take the time to actually do some research. Also, take the time to develop relationships with media outlets beyond paying three or four of them and ignoring the rest. Beyond marketing - play fair with your retail partners. Stop selling directly to the grey market, and stop dumping loyal, independent retailers who actually pay their bills in favor of large chains.

2.  Media - take a moment and try to remember what got you into covering watches in the first place. Content is what is (apart from click farms) going to drive traffic and engage readers. 

Anticipate Change

Brands - If you dump your loyal retail partners and the "volunteer" media that so loyal supported you for free, be prepared for the reality when your budgets shrink to the point where you have to cut your advertising. 

Media - If you paint yourself into the pay-to-play corner that is payola, be prepared for fewer and fewer brands to have "cheese" for you.

Monitor Change

A read of the latest FH is actually sorta' comical when it really should be a grave bellwether. Change has been churning in Watch Town for the past 5 years, but it is also clear that Watch Town. has not always had their eyes on the prize. Referring to the latest export numbers as a less marked decline is about as accurate as being "a little bit pregnant.

Adapt To Change Quickly

Unfortunately, not everyone's idea of quick is the same, and sometimes a brand can go back to the well one too many times. A quick example - maybe dropping boatloads of cash on an American football player is perhaps not the most "transmittable" idea for an international clientele to get their heads around. This was maybe not the most realistic or well thought out approach to help your retail partners (even the ones in North America "reach their star" - wherever the hell their star may be. In fairness to Zenith, this is straight out of the LVMH playbook. But it is myopic. It looks good to a handful of people, but it fails to take into account that Zenith has been and will continue to be a brand that is unlikely to ever have the mass appeal in North America of TAG Heuer or even Hublot. And in all honesty, without Biver pushing, the celebrity partner game is a tough sled.

Change

Move With the Gruyère!

Courtesy of Wikipedia

Enjoy Change!

Let's be honest - what other options do you have? Yes, Italian sports cars dressed up as company cars and performance bonuses based on, essentially doing nothing are great! But when you brand is losing money hand over fist, year upon year? Look for a vintage Yugo and live within your limits.

Be Ready To Change Quickly And Enjoy It Again

They Keep Moving The Gruyère. Just ask Aaron Rodgers...

Sorry, too soon?

Editor's note - Henki is actually a pretty big fan of Aaron Rodgers and takes pains to point out that he is one of the few big time quarterbacks to emerge from a JUCO (Junior College) to not only play Division 1 (at California) but move on to a very successful pro career. Henki's point is simply this - CURRENT pro athletes are always a tough sell, but those who have played and are still relevant after their playing, driving, skiing, running days are over?  Well that's something else again.  Sabrina MacIntosh - Senior Editor

Re-heated Leftovers - What David Epstein Could Teach the Watch Industry

This first ran around this time last year. And given the comings and goings in Watch Town it seems pretty valid today.  So pour yourself a coffee and get comfy -

What David Epstein Could Teach the Watch Industry

I first heard of David Epstein on Dave Chang's 
podcast - The Dave Chang Show.  And the fact that I first got dialed into Mr. Epstein's thoughts on the value of generalization over specialization.  I have dipped into his book - Range:  Why Generalists Triumph in a Specialized World.

Courtesy of Macmillan

And I feel it was particularly appropriate to learn about Mr. Epstein's work on a podcast that is, ostensibly, about about food and food culture.

My main takeaway from the podcast and the bits I've been able to digest directly is that not unlike Bob Dylan's message that the "the loser nowWill be later to win", the times are indeed A- Changin'.

Now for my part, I probably really got my start on the periphery, as a fan, participating on a limited basis in discussion forums.  I then stumbled into a job at Tourneau in San Francisco, and later with DOXA. A blog led to a media business which led to a consulting concern that touches on sales, marketing, media, production, and on and on.  So it's fair to say, this speaks to me.  

So gentle readers, allow me to share with you what the watch industry could learn from David Epstein -

“Overspecialization can lead to collective tragedy even when every individual separately takes the most reasonable course of action.”
David Epstein

I see this a lot in the watch business and saw it painfully so with two former darlings of the business who collapsed less than three years from their first products were delivered to the public. But it goes deeper than this and in fairness to the former Kronaby and Klokers, both of these brands were led by people with experience in consumer products. And in fact, you can see it in the brands that have been through some particularly rough waters.  GP, UN, Eterna are wonderful brands that in the past have suffered from "Silo Syndrome".  Essentially that they were staffed with a bunch of specialists who were discouraged from collaborating.  While it is tempting to tell people to "stick to their lane" when they feel the sole of a foot on their toes, it might, in fact, be worth a listen to those colleagues with a different perspective.


“We learn who we are in practice, not in theory.” 
David Epstein

What I'm about to say is going to sound mean, and it is not meant to.  It is easy to say that a leopard can't change its spots, and I think that is a gross misunderstanding that people, particularly in the watch business have.  Some of the sharpest operators in the industry also keep the lowest profile. As mentioned here before, it's inevitable to fail. The trick is not to make a habit of it.  And failure offers a wealth of lessons. Some of these lessons can be highly personal, where we need to examine how we handled various situations and how we might have done things differently. 

Put another way, words are great, mottos are great, and a good looking CV is just that.    Now, how then do we explain the serial recycling of executives, sales reps, PR firms from one brand to the next and back again?  It actually goes back to overspecialization.  What Moneyball referred to as the "look test".  In essence, only "baseball people" could understand the game and how to work within it.  And what Bill James, Billy Beane and others proved is that just wasn't so.  

And the watch business is unique in the short memories it instills in many of its gatekeepers.  People who entered the industry from others quickly forget that fact when they start running a brand.  Suddenly, only "watch people" (i.e. industry veterans) can possibly understand what it takes.  And as short-term history shows, some of these serial staffers are cycled through and spit out of the formal (read big brand) industry, and those who managed to remain in Watch Town had to create their own opportunities. Because what they forgot was that they were the exception, and now that they have had their wings clipped, they are officially no longer "true" citizens of Watch Town. This either proves their own misguided theories (and short-term personal memories), or shows that they were, perhaps, victims of over specialization.


“You have people walking around with all the knowledge of humanity on their phone, but they have no idea how to integrate it. We don’t train people in thinking or reasoning.”
David Epstein


I am actually pretty grateful for this, because otherwise I would not 

have clients ; )

This actually comes back to the "Silo Syndrome". Being an expert is great, but unless you can see the bigger picture, it is increasingly harder to adapt to it. As brands continue to contract in size and need to become more nimble, the ability to think outside of your cubicle becomes more and more essential.

“Almost none of the students in any major showed a consistent understanding of how to apply methods of evaluating truth they had learned in their own discipline to other areas.” 
David Epstein


See above.

“The challenge we all face is how to maintain the benefits of breadth, diverse experience, interdisciplinary thinking, and delayed concentration in a world that increasingly incentivizes, even demands, hyperspecialization” 
David Epstein


So let's talk about brand management. Typically, brand managers are promoted through the ranks of the sales department. It makes sense on a lot of levels, no sales means not brand. But even at a regional level, let's say North America, you need to have the flexibility to weigh in on all aspects of the operation. I can't tell you how many meetings I have been to where the brand manager will pass the buck by saying things like -

"Oh, that's marketing. You'll have to talk to...".

This is not to say that you should not have department heads, and people with responsibilities. But really that conversation should go more like this -

"Oh, let's (collaboratively) talk about this with the marketing team..."

What currently happens in a lot of brands is a fundamental disconnect from certain functions that they either feel uncomfortable with or are disinterested with. Say what you want about him, but Jean-Claude Biver was perhaps the first (and still one of the only) brand manager/brand leader/CEOs who made a point of involving himself beyond just sales. Towards the end of his tenure that trailed off, but there was a time where I suspect Hublot was an extension of his central nervous system.

“As each man amassed more information for his own view, each became more dogmatic, and the inadequacies in their models of the world more stark.” 
David Epstein


Too many examples to site.  


“In a wicked world, relying upon experience from a single domain is not only limiting, it can be disastrous.” 
David Epstein


It is important to have a centralized plan for a global brand.  But there needs to be an understanding of locality/reality.  Simple example - F1 is, by and large, not a thing in the US, no matter how much a brand would like it to be, it just isn't.  Neither is rugby.  If we're very honest, neither is sailing, neither is Chinese language cinema.  And yet, I keep getting press releases about partnerships like this.  

And an even starker example could be found at the SWATCH group and the ETA/COMCO fiasco. When you do not consider the possibility that things just might not go your way?  It can be fatal.

Rest assured, ETA is not going out of business, and I have no doubt that some agreement/accommodation will eventually be reached. But in the here and now, several of ETA's more well-heeled customers are having to lump it, and if the word around the campfires in the Jura are to be believed, some loyalists might be looking for a new camp to call home.